What is the best way?
1. Scanning your positives with open levels and correct the image in Colorwasher.
2. Or before scanning correct the image with the levels and after scanning fine tune the image in Colorwasher.

The Levels feature that scanner software offers is applied after the scan was completed and has no influence on the scanning settings itself. In such a case it makes more sense to correct the Levels in ColorWasher itself, if you plan to use ColorWasher on the scanned images.

That saves you time and gives you more possibilities, because ColorWasher applies the Level/Contrast correction after the color correction was performed. If you have the levels adjusted before the color correction was performed, the result of the color correction may not be that good.